Will the launch of Amazon Prime disrupt the OTT sector?

Will the launch of Amazon Prime disrupt the OTT sector?

Author | Madhuwanti Saha | Monday, Nov 07,2016 8:42 AM

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Will the launch of Amazon Prime disrupt the OTT sector?

Amazon India is all geared up for its new product launch, the much-awaited Amazon Prime Video on November 18 and it is reported to be included in the Prime subscription charge. This means that for Rs 499/year or Rs 42/month, Indian users will not only get access Prime Video and its immense catalog of movies and TV shows but also benefits like free one day delivery, no minimum order size and exclusive deals.

If compared with the subscription rates of Netflix and Hotstar, Amazon will be much lighter on its consumers’ wallets. Netflix starts at Rs 500 per month and goes up to Rs 800 meanwhile HotStar comes at around Rs 1200 every year. Clearly, this can impact the video streaming in India.

When it comes to content strategy, Amazon India not leaving any stone unturned, especially following its aggressive partnerships with major Indian productions to acquire exclusive rights for their existing as well as upcoming movie titles. One of the tie-ups was with filmmaker SS Rajamouli, Graphic India and Arka Mediaworks to spin off blockbuster movie, Bahubali', into a new multi-episode animated series called 'Baahubali: The Lost Legends'.

Amazon India also inked a deal with T-Series, one of India’s largest movie production and distribution studios. The tie-up will give Amazon India exclusive streaming rights of future titles from T-Series, ahead of their television premiere. Then there is its partnership with Dharma Productions and Vishesh Films, which gives Amazon India access to the former’s select blockbuster titles and all of latter’s 53 titles. This throws light on the potential India holds for Amazon who is investing up to $300 million in funding movies and series ideas for Prime, part of the $3 billion fresh funding war chest CEO Jeff Bezos announced for India in June this year. 

According to media reports, the company is also reportedly in talks with Farhan Akhtar and Ritesh Sidhwani's production house Excel Entertainment for its first original show, 'Power Play.’ Earlier it had roped in acclaimed director Vishal Bhardwaj and Vidhu Vinod Chopra on-board for an original series. Amazon has also picked up the tender documents for bidding for digital media rights to broadcast IPL, currently held by Sony.

 Amazon India didn’t respond to the mails we sent out inquiring about its further long term plans for Amazon Prime Video.

Will it be game-changer in the OTT space?

Rajiv Dingra, ‎Founder and CEO, WATConsult feels there is a typical 24-month cycle for Amazon to be a force to reckon with. He says, “It will not disrupt at least in the short term. OTT sector in India is cluttered right now with multiple options for consumers. But in the longer run Amazon is a serious player in this space. In two years it’s going to give tough competition in terms of deep pocket and ability to strike deals to the likes of others who are currently in this space. Typically there’s a 24 month cycle for them to invest and scale up. Luckily they are investing in a space where there’s no clear market leader. So definitely in that time frame Amazon will be a force to reckon.”

Ashwin Suresh, founder of digital entertainment start up Pocket Aces, is positive about the disruption with Amazon Prime Video’s entry as he says, “In next 24 months there will be a lot of noise around all the OTT players because everyone from Hotstar, Balaji to Netflix are going to create noise to lure subscribers. As a consumer, Amazon Prime membership is most attractive because I am getting free shipping and other services, all bundled in one.”

Suresh goes on to mention where other players are falling back which Amazon India can use to its advantage to win the race. He says, “Netflix has a limited content with hardly any focus on local content. Hotstar’s fiction library is limited and they are not creating a lot of original fiction. Voot is doing that but the traction of the content is poor. There's no word of mouth (buzz). So there’s huge room for OTT platform to create original content. Amazon is trying to attack that. If they are able to pull off good content (which only time could tell) they could easily become the market leader here. Amazon prime subscription is 500 bucks a year. I predict this will be a huge game-changer for Amazon".

Ekalavya Bhattacharya, Chief Strategy Officer, ALT Digital Media Entertainment, points out its advantage  saying, “What is Amazon Prime doing is great for the entire OTT ecosystem. More than their current launch what’s exciting is that they are investing a lot on original content in India. They definitely have the e-commerce advantage going for them as they can link the Prime subscription for Video with their Prime offering on Amazon.in. If this encourages a lot of people to sample a SVOD service is India, it augurs well for the entire ecosystem. There will be a lot more data and I'm sure we'll get to notice a lot of new consumer behavior patterns, especially as it seems that Amazon and Netflix have pretty different India plans.”

Uday Sodhi, Executive Vice President and Head - Digital Business at Sony Pictures Networks India believes it’s best to wait and watch once the launch happens. “This is great for the ecosystem as there will be another international player who will invest in building the habit of consuming content on digital. The whole ecosystem is growing because of all the efforts put in by both telecom bandwidth providers and content providers. Whether it will disrupt that we will get to know only once it launches since we don’t know their modus operandi. It will be interesting to see how they execute and what have they planned for India. We are hoping this will drive more consumption and better adoption of OTT. That will be the biggest takeaway for us,” he says.

We tried getting in touch with Viacom for their take on Amazon Prime but they refused to comment.

Subin Subaiah, CEO, Spuul says, “Globally the viewership is moving towards VOD and one can also see this increasing adoption of digital video consumption in India too. This has thrown the field open for a lot of players in the country and the entry of Amazon Prime is a welcome and much anticipated move for the VOD space in India. With robust smartphone penetration and launch of 4G, one can foresee a tectonic shift in consumption that will forever change the entertainment industry. With the entry of the likes of Amazon Prime, VOD space will be poised for growth as video content will be created and marketed specifically for the web and devices. However content, accessibility and overall user experience will play a game changer for any player to succeed in India.”

Heating up competition

Right now 2016 has  been a bustling year in the OTT space with entry of new both domestic and international players, specifically Netflix, and fresh content.  Almost every broadcaster has their own OTT service that includes the likes of Hotstar, Sony Liv, dittoTV and Voot and then there are other players like Viu, YuppTV, ErosNow, Spuul and Hungama, among others. With Amazon Prime’s arrival the competition is definitely going to get more aggressive with the existing service providers stepping up their game, strengthening their content strategy with more appealing content for their TG.

We also asked the experts in this space if Amazon Prime’s entry will affect other players. Suresh suggests a wait and watch stance as there are some players who are well positioned with differentiated offering. He says, “For instance Hotstar has a big edge with sports and their HBO library. Those are the things consumers will pay for. It’s the likes of dittoTV, Voot and Sony Liv who are struggling. Their content can be accessed on TV. The ones specific to digital are not high quality. Netflix will still be fine because they have steady output coming from other regions. It is taking slow and steady but with big names on the local content front. Amazon is also doing shows with big names. Time will tell how that will play out. Amazon has more room for trial and error because it’s got so many other services. Other advantage is their supporting hardware which is Amazon Fire TV.”

Dingra thinks the space will now see a consolidation, “It will heat up competition. You will see a lot more funding for the smaller-funded players. Possibly, some of them will shut shop, especially who are not able to figure out their business model. Overall in two years there will be consolidation happening in this space.”

Sodhi is positive about the competition that Amazon Prime will bring about. “Competition will drive more usage and improve the quality of service. With more content coming in there will be more choices for consumer. This industry is geared up for huge growth. There is room for more and more players.”

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